In Oklahoma: Bio-diesel, oil crops promoter drives innovation

A drought unrivaled since the 1950s destroyed most of Matt Gard’s canola crop last year, but the Fairview, Okla., farmer believes acreage in the deep-rooted oil crop will continue to expand throughout the region.

Better risk management tools help but another driving force is the biofuels explosion and the potential to use canola in bio-diesel.

“It will happen,” Gard insists. Small individual or cooperative projects are in the works around the state, according to the Oklahoma Rural Development office.

“We are a pen-stroke away from having several new biodiesel plants built,” Gard says.

Canola has one of the highest concentrations of oil by weight, which makes it extremely popular with refiners. Forty-four percent of the seed is oil compared with 22 percent for soybeans.

“Canola is the best seedstock for biodiesel. It is naturally low in free fatty acids. It is naturally a much cleaner burning fuel,” says Wayne Janzen, who operates Prairie Gold Oilseeds LLC in nearby Okeene, Okla. “Sunflowers come in a relatively close second. Soybeans tend to be a bit further down the list.”

Blue Sun Biodiesel, an alternative fuels processor based in Colorado and partially funded by a farmer cooperative, has flirted with the idea of establishing operations in Oklahoma. Blue Sun's diesel fuel is currently available at numerous retail pumps throughout Colorado, New Mexico, Nebraska and Idaho. The company has shown interest in teaming with Johnston Enterprises, the state’s largest privately owned grain company, to set up several biodiesel plants.

More help could come from OK FREE, a committee organized under the auspices of Oklahoma Farmer’s Union working to locate an oil-crushing facility in the state. Gard is a member of that group, which is looking at a plant that would “gobble up 100,000 to 110,000 acres of canola,” he says. A grant-funded feasibility study is complete, and the project could come together as early as next summer.

The group is also broadening its horizons beyond biodiesel to include the possibility of producing food grade canola oil.

“The United States imports seven million acres worth of canola oil annually,” Gard says. That’s a market local farmers might want to pursue.

“I don’t think we’re actually in competition with Canada,” he says of the world’s leading canola producer. “The first year we grew canola in Oklahoma, we beat the North Dakota state record for yield. That was in 2005.”

Right now, he says the industry is facing something of a “chicken or egg” scenario.

“It’s hard to ramp these two things up — production and crushing capacity — without doing it simultaneously,” he says. “We’re hovering around 50,000 to 60,000 acres (of canola). With better fall moisture, we would have had 20,000 to 30,000 more.”

Gard and other organizers are keeping all options open.

“Because canola acres have declined due to weather concerns, our committee is now looking at the plant being a multi-oil feed stock plant that could utilize peanuts, sunflowers, soybeans and other (crops).” The bonus for farmers would come in additional planting options, as well as the opportunity to invest. A new study is underway to determine the feasibility of a multi-seed facility.

“We’re going to have everything in place — and we will have spent more than $1 million before it’s over — to make sure we have a bulletproof plan for the 2008 harvest. Somebody will buy the crop for a good price,” Gard says.

The domestic biodiesel industry is expanding at an exponential rate, with production of biodiesel rising from 500,000 gallons in 1999 to more than 150 million gallons. At least 50 biodiesel plants are under construction in addition to 65 already operational. With at least two ethanol plants slated for the Enid area, dryland corn and grain sorghum acreage is expected to increase, which means canola will have to compete for every acre.

That’s just what Gard and other area farmers are hoping for. “Biofuel (production) is coming, and it’s something I can have a direct impact on.”

Canola offers potential for Oklahoma farmers

A year after widespread crop disaster, the Federal Crop Insurance Corporation extended provisional coverage to canola for 2007. Although insurers tinkered early with the yield guarantee, Matt Gard, Fairview, Okla., farmer, believes the result is a workable safety net in most cases.

“Eighty percent of the typical wheat yield is more than fair,” Gard says of the coverage. “Typically the first or second year of growing canola, you get an 80 percent crop comparable to a typical wheat yield. Yields improve as farmers get comfortable growing canola.”

Eventually, a track record of reliable crop production history should lead to a permanent program. Gard, who is also a seed dealer and certified crop advisor, would like to see that happen.

For now, an area’s average historic wheat yields will influence canola insurance. Those who consistently raise wheat for grazing rather than grain will face yield guarantee restrictions. Gard believes farmers in Southwest Oklahoma have as much opportunity to grow canola successfully as those further north but concedes that insurance coverage will be hampered by “wheat yields not what they should be.” Areas of the Southwest have also been hardest hit by drought, while the panhandle has become the state’s unexpected “garden spot.”

Gard was one of the first farmers to jump on the canola bandwagon after attending a meeting in Kansas four years ago.

“I saw possibilities with canola and what it would do for local farmers, even if they rotate it on just 10 percent of their acreage,” he says. “This will help clean up wheat fields and that benefits the grain elevators so they can pay more. Plus, a farmer will typically get a 15 percent increase on next year’s wheat harvest because he rotated to another crop.”

Farmers have several strong canola varieties available. K-State’s Sumner is the only one that can be planted following wheat treated with sulfonylurea broadleaf herbicides (such as Glean, Finesse or Maverick). Farmers have “Round-up Ready” or conventional seeds.

There’s some evidence that canola will work as a winter forage, too, although more research is needed. “I got along great grazing it for two years,” Gard says. “But one year it got too wet and the plants were badly bruised, which resulted in a yield loss of 10 to 15 percent. Probably the best money for a producer is not to graze it and go for the yield.”

Local canola prices have varied widely since the crop was introduced, when bids of $12 to $14 a hundredweight were widely quoted. Last summer, elevators were offering around $9 a hundredweight and, Johnston Enterprises in Enid, one of area’s leading canola merchandisers and handlers, is forecasting prices will be $10 to10.50 per hundredweight next summer.

Canola follows a similar production cycle as wheat, with harvest in June.

As of December, Johnston wasn’t taking old crop canola. Due to its high oil content, it’s a difficult crop to store on-farm, particularly with Oklahoma’s warm climate, Johnston’s Joey Miebergen said.

Another obstacle hindering prices is transportation. “If you have to ship it to Velma, North Dakota, that eats up too much freight,” Gard says. ADM operates a large crushing plant there and is building an adjacent biodiesel plant.

Gard and other industry leaders would like to develop more local end-users.